Senate Committee Adopts French Pension Reform Bill

by Ulrika Lomas, Tax-News.com, Brussels

06 October 2010

Following two days of at times heated debate, the French Senate Social Affairs Committee has adopted the government’s highly controversial pension reform bill, without major modifications to the text.

Although the committee adopted a total of 113 minor amendments, it nevertheless adopted without change the corner stones of the reform bill, including plans to increase the legal age of retirement to 62 and to raise the age of entitlement to a full pension to 67.

Welcoming the committee’s decision to adopt the bill, French Labour Minister Eric Woerth emphasized that much progress had been made during the course of the debate, and hinted that further progress was likely in the forthcoming plenary session, due to begin on October 5. There is still scope for manoeuvre, Woerth stressed.

Modifications to the reform bill include plans to grant all workers in France, recognized as disabled, entitlement to early retirement at 55. Woerth estimated this figure to be “a million people”.

Another amendment provides for an extension of the mechanism providing for a retirement equivalent benefit (l’allocation équivalent retraite – AER), a replacement or supplement income for individuals involuntarily deprived of employment, to those unemployed individuals nearing retirement, to avoid a gap in contributions. A similar mechanism is also planned for victims of asbestos.

Although no concessions were made during the course of the discussions regarding the issue of women, despite a lengthy debate, Labour Minister Woerth did promise to address the issue during the plenary session, underlining the fact that if there are injustices, attempts would be made to rectify the problem.

Following a further day of widespread strike action and demonstrations in France, senators are now preparing to examine the bill. Adoption of the text is far from assured in the Senate, however, as French President Nicolas Sarkozy’s own party, the Union for a Popular Movement (UMP), do not hold a majority. Indeed, in the past senators have already shown that they are not afraid to display their independence.

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